Tuesday, March 26, 2013

The Property Tax - A Tax too far

This week saw Sinn Féin publish a Bill which seeks to repeal the Property Tax. The Financial Local Property Tax Repeal Bill is about lifting the burden of this unfair tax off families and households and to replace it with alternative measures to raise taxes, including a wealth tax.

The record of this government in its two years in power has been appalling. Fine Gael and Labour were elected to undo the damage of Fianna Fáil but have chosen instead to implement Fianna Fáil policies.

The government’s austerity policies are driving up poverty and disadvantage. Emigration and unemployment are at record levels; public services, particularly health, are in crisis and there are more cuts to be imposed this year; the economy is flat lined and another new tax – the family home tax – is to be forced on households in the coming months.

Both Labour and Fine Gael opposed the property tax in opposition. The Taoiseach said in the Fine Gael election manifesto that:

“Fianna Fail’s proposal, now endorsed by the Labour Party, to introduce by 2014 an annual, recurring residential property tax on the family home is unfair” (P59)

But on his watch householders across the state have now received letters from revenue demanding payment of a tax on their family home. The first payments are due in the summer. This is a tax that takes no account, of ability to pay, those in negative equity, those who paid stamp duty or the 140,000 families in Mortgage distress. The financial implications for households are very serious. It will especially punish those on low and middle incomes, social welfare recipients and the disabled.

It is a tax proposed by Fianna Fail and implemented by Fine Gael and Labour. It is a tax with no waivers and whose so-called exemptions are quite frankly a joke. This family home tax is a draconian piece of legislation which takes no regard of the impact it will have on parents trying to put food on the table or to heat their homes.

The government is pursuing a policy which will drive more and more people even further into debt.

It has also ensured that the revenue has the means to take this tax irrespective of the individual or family circumstances. The tax can be deducted from people’s social welfare, from wages, from their Bank accounts, and even from their Credit Union accounts.

Michael Noonan said: "The Revenue know how to collect taxes and they WILL collect taxes and they are also being mandated to collect the arrears on the household charge."

The government has taken a totally coldblooded stance. Regardless of a person’s ability to pay the money, it will be taken directly at source from wages or pensions or social welfare.

Households will have to manage a dwindling income. Some will buy less food; others will turn down or off the heating; children will have to make do with more hand-me-downs and all the time the government will impose more stealth taxes like water charges.

The reality is that the government is creating additional debt at a time when the economy desperately needs consumers to be spending more to lift the domestic economy, save jobs and encourage growth.

The reality is that the Property Tax is for many households a tax too far. Many families will be pushed over the edge by this tax. When added to the taxes and charges introduced by the coalition government, including the Household Charge, increases in VAT, septic tank charges, cuts to child benefit and much more, it will have a grievous impact on working families.

It is being introduced by Labour and Fine Gael to raise money to pay the debts of the banking system not to provide public services for citizens. In fact funding is being cut for public services by these parties.

There are alternative measures that the government could have taken, including the introduction of a wealth tax on all property, liquid and assets, above a certain net wealth.

Sinn Féin’s proposal is to levy a 1% wealth tax on all net wealth over €1 million with certain exclusions. Because it is net wealth, it takes into account mortgages and loans. Because it has a high value, it protects struggling families. And because it is aimed at high net worth individuals, it is dealt with by people used to engaging with the revenue system, who very often have tax accountants dealing with the system on their behalf.

So Fine Gael and Labour had a choice. They could have opted to take more from those who can afford it. Instead, Labour and Fine Gael chose to inflict more pain on struggling families.

Sinn Féin intends introducing a bill to reverse the Property Tax. In the meantime we are urging citizens to lobby their local politicians, particularly government TDs and councillors to support the bill.

The only way to stop this tax is to repeal the legislation.No other measures such as boycott or refusing to value your home will work.We need to build campaign for the repeal of the bill and that is where Sinn Féin is focussed.